CAUV

Projections for Ohio's Current Agricultural Use Value (CAUV) Program

View the Project on GitHub rdinter/CAUV

CAUV

Projections for Ohio’s Current Agricultural Use Value (CAUV) Program for each soil type in Ohio, based on the 2017 formulation which substantially changed from previous years. The Ohio Department of Taxation (ODT) provides an overview of the caclulation for CAUV values which are used within this repository.

The purpose of this repository is to have open source documentation of the calculation for CAUV values which can also be leveraged for projecting future values for soil types CAUV valuation. Likely of most interest is the current projections for CAUV that you can find by clicking that link. A more dynamic version with descriptions is available at Ohio CAUV Value Projections for 2019 and 2020PDF version also available

Current 2020 projection:

Components:

An oversimplified description of how to calculate the CAUV value for a particular soil type is that it is the expected net returns from farming corn, soybeans, and wheat on an acre of land divided by capitalization rate to give a present value for owning a piece of land for commercial agricultural production. Please read the CAUV formula description for a more in-depth understanding of the program. The following pages provide description of the data involved with each component:

  1. Rotation
  2. Yields
  3. Prices
  4. Non-Land Costs
  5. Capitalization Rate

The usdarnass package is used for updating official USDA data and is not on CRAN. To install, a user must run the following command in R:

devtools::install_github("rdinter/usdarnass")

Afterwards, the user must register a NASS API Key through USDA and install the key on their local machine with the set_nass_key("YOUR_KEY_IN_QUOTATIONS") command with the nassR library.

Organization:

The structure of the repository is as follows:

Years Used in CAUV Calculation

All categories are Olympic averages with the exception of rotation and yields.

Tax Year Capitalization Rate Yields Prices Non-Land Costs Rotation
2005 1999-2005 1984 1997-2003 1998-2004 ad hoc
2006 2000-2006 1995-2004 1998-2004 1999-2005 ad hoc
2007 2001-2007 1996-2005 1999-2005 2000-2006 ad hoc
2008 2002-2008 1997-2006 2000-2006 2001-2007 ad hoc
2009 2003-2009 1998-2007 2001-2007 2002-2008 ad hoc
2010 2004-2010 1999-2008 2002-2008 2003-2009 2004-2008
2011 2005-2011 2000-2009 2003-2009 2004-2010 2005-2009
2012 2006-2012 2001-2010 2004-2010 2005-2011 2006-2010
2013 2007-2013 2002-2011 2005-2011 2006-2012 2007-2011
2014 2008-2014 2003-2012 2006-2012 2007-2013 2008-2012
2015 2009-2015 2005-2014 2008-2014 2009-2015 2010-2014
2016 2010-2016 2006-2015 2009-2015 2010-2016 2011-2015
2017 2011-2017 2007-2016 2010-2016 2011-2017 2012-2016
2018 2012-2018 2008-2017 2011-2017 2012-2018 2013-2017
2019 2013-2019 2009-2018 2012-2018 2013-2019 2014-2018
Future current-6 years ago previous-11 years ago previous-7 years ago current-6 years ago previous-5 years ago
Years 7 Olympic 10 Average, lag 7 Olympic, lag 7 Olympic 5 Average, lag

Sources and timing of release:

  1. Capitalization Rate - interest rates come from Ohio Department of Taxation while the equity rate comes from USDA-ERS which has updates each year in February (should be considered “official”), August, and November.
    • USDA data files, should select the Farm Income Statements and then returns to operators
  2. Crop Production Reports affects yields and rotation. Typically there is an August, September, October, and November forecast. Then finalized values occur in January of the following year. The USDA Quick Stats API will incorrectly place the most recent forecast value for the current year in the “YEAR” reference period. This needs to be accounted for.
  3. Prices are for the marketing year period which are published by the USDA-NASS and have monthly prices. However, the official values come out around March each year.
  4. Non-Land Costs maintained at the Ohio State Extension website and there will usually be an initial estimate for the budgets in October of that year with the final update usually around May.

Typical timeline, using Tax Year 2019 as example:

Month Release Notes
May 2018 Crop Wheat acres/yield forecast for 2018 value (used in 2019 formula)
June 2018 Crop Corn, soybeans, and wheat acreage report plus wheat yield update
July 2018 Crop Wheat acres/yield forecast
August 2018 Crop, ERS Corn, soybeans, and wheat acres/yield forecast
September 2018 Crop Corn, soybeans, and wheat acres/yield forecast
October 2018 Crop, Budgets Corn and soybeans acres/yield forecast; Ohio State Extension releases first budget report
November 2018 Crop, ERS Corn and soybeans acres/yield forecast
December 2018 Crop  
January 2019 Crop Finalized corn, soybeans, and wheat acres/yield
February 2019 ERS ERS finalizes the value for return to equity
March 2019 Prices First published marketing year price data on corn, soybeans, and wheat for 2018
May 2019 Budgets unofficial, there is no hard date for this but usually the
August 2019 ODT Official Values; FCS Interest Rate for Cap Rate Rough estimate
November 2019 Prices Official marketing year price data on corn, soybeans, and wheat for 2018